Geopolitical Podcast: America wages economic war and could re-industrialise at the expense of Europe
A geopolitical Podcast by Economist Christian Takushi on Sunday 25 Sep 2022 – Switzerland
Mr. Takushi broadcast a 20 minute podcast this Sunday 25 September focusing on the triple shock: strong USD, steep rise in interest rates and record high energy prices. Europe is the biggest victim of this US policy moves.
This is a supplementary service for our newsletter readers. It assumes the listener is acquainted with our strategic research. The content is neither new to them nor strictly strategic, but Mr. Takushi felt the announcement of an aggressive fiscal spending policy by the new UK governments needs to be seen against the backdrop of the geopolitical-monetary Big Picture. A high risk approach, that might work. Kindly see this as a complement to his newsletter reports.
A Geopolitical Podcast
Geopolitical roundup – World events explained in less than 30 minutes
- America wages economic war with a triple onslaught and could re-industrialise at the expense of Europe.
- The strong USD, a fast-paced increase in interest rates and high energy prices are reinforcing America’s Superpower status.
- Washington is definitely hurting China-Russia and their allies, but the biggest victim or collateral damage by far is likely to be Western Europe: the EU and UK.
- Some big Emerging Markets are weathering this global crisis much better than Europe. The currencies of Brazil, Mexico and Peru are stable versus the USD over the past 12 months. They have even been able to strengthen vs the USD over that troubled time. In the past Emerging Markets were devastated whenever a global crisis hit, this time it is Western countries being hit worst – along of course troubled Developing Countries. Many people do not differentiate between Emerging and Developing Markets. Brazil is an emerging market. Bolivia is a developing market. Argentina is not even a developing market, rather frontier.
- Some say the EU can only blame itself, but ironically Britain has been America’s most loyal ally. Europe runs the risk of being devastated.
- Other victims are indebted developing countries. Emerging Nations with disciplined monetary and fiscal policies superior to the G7’s are likely to overcome the geopolitical-economic onslaught by Washington much better. But when they do, they will move away from the USD. I expect the USD to go from 60% share of the world’s reserve currencies to just 40% during the course of this decade, but it could be worse. It will limit the extent to which Washington can simply print money and spend beyond its means at the expense of the rest of the world.
- Takushi has not included “US military exports” in this list of three deployed assets, because we’d be implying Washington started a war on purpose to sell weapons and hike energy prices. The latter is an alternative working theory that is gaining traction, but one that is not proven and assumes evil intent. In Takushi’s equilibrium analysis, there is no need to assume evil US intent. It is rather more likely that geopolitically smart Washington is taking full advantage of the war and Europe’s big mistakes before and after the invasion. In a way, Washington is proving to be much more pragmatic than Europe .. and is using the current war in Europe to reassert its global power. Just as it did in WW1 and WW2. History does lend support to this cautious working hypothesis of pragmatic US opportunism, because America didn’t start WW1 nor WW2 in Europe. It simply waited, came in at the right time and seized the opportunity to expand its global influence. There is nothing wrong with it: The geopolitically smarter partner wins and exercises economic power over all its allies and enemies alike.
Global Geopolitical Research Team
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